Wednesday, February 4, 2009

'Helping a big group like Tatas is a big dilemma for govt'

Q&A: Brendan Barber, Chief of UK's Trade Union Congress

S Kalyana Ramanathan / London 3, 2009,

Brendan Barber, the 57-year-old chief of United Kingdom’s apex labour union, Trade Union Congress (TUC), is in sharp contrast to the fire-spitting, red flag-waving union leader common in India. For the starters, he is also a non-executive member on the board of the Bank of England.

This is a difference Barber is conscious of and says he will not lecture on what his comrades in emerging markets should do or how they should do their job. Barber shares with S Kalyana Ramanathan his thoughts on the recession in the United Kingdom and the rest of the world and hints at challenges British companies owned by non-British groups may face in getting the UK government’s support to tide over the recession, even as he treads carefully not to sound nationalistic in a globalising world.

Do you have your own prescription to tide over the present recession in the UK?The government has been addressing some of these issues, though we are yet to see the impact of some of the decisions that have already been made. There is still work to be done to see the banking system working — to try and get banks to lend properly. A lot of financial institutions are withdrawing to the home base to try to build up their balance sheets again. In the case of British companies, 30 per cent of the lending came from international banks.

In terms of stimulating the economy and trying to keep people in their jobs, the idea is to make big investments in major public works, which the government has talked about but has not yet been able to deliver. I would attach a lot of importance to that. We still have major social housing needs in Britain. We still have many problems with transport infrastructure that need attention without making work for the sake of making work.

Hence, I will kind of group the major issues in three areas — banking and financial issues, public works issues and measures in the labour market to try and help workers through these difficult times.

How does the TUC reach out to large emerging industrial economies like India?If British companies are trying to set up business in India, they should have an open and friendly approach to labour (issues) and be open to trade union organisations. So when some of the big banks offshore to India, we make sure that they are open to unionisation.

Are they doing it?Yes, to some extent. Barclays, for example, is doing it.

Tech companies in India have predominantly stayed outside the ambit of trade unions. Cases like Barclays seem to be an exception.I would say it is an exception. As you say, unions have struggled to establish (themselves) in growing (tech) sectors. We are assisting where we can and trying to assert some influence.

Is ownership of companies like Corus and Jaguar-Land Rover making it difficult for unions to push their agenda given the job cuts declared by companies like these in the recent past?It is not viewed as a major issue. But clearly, for the government being asked to provide substantial financial support to a huge global company like Tata, the government wants to be convinced that the company could not itself provide the additional funding to tide its British operations through a difficult time.

So there is that extra dilemma that if it is a wholly owned British company whose accounts are totally transparent, it is easier for the government to make a judgment about how much help is needed from the tax-payers and not quite so easy to make that judgment if you are dealing with a massive global conglomerate like Tata.

Are you suggesting that the ownership of these companies is working against them now?No, I don’t think that necessarily. We were not opposed to Tata taking over (these companies). They have the capacity to make major investments and develop these companies. Clearly, the problem in the steel industry is huge on a global scale, and in the car industry as well. I am simply describing the different complexities for the government being asked to provide major support if it is dealing with a company with interests spread around the world.